What's in store for business schools in 2011?

With new deans at Harvard, Kellogg, Chicago, and INSEAD, a boom in MBA admissions consulting, and the first revamping of Wharton’s MBA curriculum in almost 20 years, it’s been a big year for business schools. What’s coming in 2011?

(poetsandquants.com) — It has been a big year in graduate business education.

After a two-year slide due to an economic implosion that saw Wall Street, big banks and other key recruiters of MBAs scale back their hiring, the MBA made a comeback in 2010. Employment rates for graduating classes improved at almost all the schools, and even salaries began to creep higher.

The comeback of the stock market also helped business school endowments. At Harvard Business School, for example, the endowment rose by $200,000 to $2.3 billion. It is still a far cry from its 2008 peak of $3 billion, but it’s at least moving in the right direction.

So what’s in store for 2011? Here are our predictions:

The MBA job market gets hot again

Early indications of job offers for the class of 2011 show a robust increase that will make next year the best in the past five for graduating MBAs. For one thing, Wall Street firms and banks, which all but disappeared from the recruitment scene for two years, are back in force. For another, a lot of other firms that had scaled back their hiring plans, from the major consulting shops to smaller boutiques, are expanding their entry pools. Boston Consulting Group, one of the world’s largest employers of freshly minted MBAs, is increasing its hiring for the class of 2011 by 18% over the previous class.

“We have gone from having almost no competition (for hiring top MBAs) in the fall of 2008 to a big ramp up this past season,” says Mel Wolfgang, who heads up recruiting for BCG in the Americas. “This past fall, four months ago, the banks really started coming back. We also saw not only a resurgence of consulting but private equity, venture capital, and hedge funds, which had been sleepy for a two-year period, began to push very hard.”

International schools gain greater recognition for their vast improvement in quality

As more companies than ever view their future in global terms, they will become increasingly interested in recruiting MBAs from prestigious non-U.S. business schools. Applicants who in years past would have automatically gone to Harvard, Stanford and other top U.S. schools will opt for London Business School, IE Business School in Spain, and CEIBS in Shanghai. Globally-minded applicants who would have chosen a top 25 U.S. school in the past will instead head for such places as Cheung Kong in Beijing and the Indian School of Business in Hyderabad. The result: many of these schools will become more selective than ever.

More B-School applicants to take the Graduate Record Exam

With a major campaign to establish the GRE as a viable test alternative to the GMAT, the GRE will make headway. An increasing number of business schools, including INSEAD, Harvard, Stanford, Wharton and Columbia, now accept GRE scores for admission. A recent Kaplan survey found that 39% of some 288 business schools it surveyed now allow applicants to submit a GRE score, compared to 24% last year. The GRE, administered by the Educational Testing Service, is rolling out significant changes to its content, design, scoring and format this year. To introduce the newly revised exam, ETS will be offering the test at a 50% discount for a two-month period starting in August.

The rise of Yale University’s School of Management

The most eagerly awaited of all the new deans will begin his tenure at a prestige school that has never fully realized its potential. Edward A. Snyder, who did an extraordinary job as dean of Chicago’s Booth School since 2001, starts his Yale deanship on July 1. Expectations are high based on his record of success as a dean at both Chicago and the University of Virginia’s Darden School.

At Chicago, “Ted” Snyder oversaw the move to the school’s new Hyde Park campus, brought in the largest donation to any business school in the world — a $300 million gift from alumnus David Booth and his family — tripled scholarship assistance to students, and more than doubled the school’s endowment. Just as importantly, he oversaw the school’s rise to first place in the BusinessWeek rankings. Chicago has been number one in three consecutive BW surveys from 2006 to 2010. Despite the nearly unrivaled reputation of its university, Yale’s business school rarely cracks top 10 lists among MBA rankings. Poets&Quantsrecently ranked Yale at 14. Expect Snyder to make an immediate impact here.

Online MBA Degrees gain credibility

University of North Carolina’s Kenan-Flagler School of Business’ decision to start an online MBA program this year will bring more prestige and stature to online business degrees. It is the first time that a B-school as highly ranked in the U.S. as UNC has entered the market. Until now, the only other quality online alternatives had come from Indiana University’s Kelley School of Business and IE Business School in Spain. Many educators at top-ranked schools, however, are watching UNC program closely. Expect more prestige schools to get into this market which, by and large, is the province of unaccredited, for-profit schools.

Stanford Graduate School of Business gets new digs

In what will be the biggest change at Stanford in decades, the business school will move into a swanky, modern campus in early 2011. The new Knight Management Center, one of the most ambitious B-school construction plans ever, is the result of an unprecedented gift from Nike (NKE) founder and Stanford MBA alum Philip H. Knight. The $350 million project includes eight separate buildings around a trio of quads, a 600-seat lecture hall, dining facilities, underground parking for 900 vehicles, and dedicated space for academic centers and career services. It will dramatically improve the culture of the school and make Stanford — already the most selective B-school in the U.S. — an even more desirable place to earn an MBA.

Dean Nitin Nohira’s plan for Harvard Business School

Will the new Harvard dean be able to meet the high expectations he has raised for change at the number one business school in the world? 2011 will provide the answer.

Nohria, who became dean on July 1, is on record saying that he will pursue “bold, brave things” that will set the course for the entire field of management education for the next 100 years. His standard alumni stump speech now vaguely addresses what has become known at HBS as the five I’s: Innovation, Intellectual Ambition, Internationalization, Inclusion, and Integration (largely with the rest of Harvard University). Everyone, however, is still waiting for that bold plan.

Greater transparency of faculty deals

The provocative documentary, Inside Job, brought embarrassing attention to professors who profit from unreported consulting and directorship deals with companies and organizations and then weigh in as “objective” observers on key policy issues in economics and financial regulation.

The documentary was especially discomforting to Columbia Business School’s dean, R. Glenn Hubbard, and Columbia B-school professor Frederic S. Mishkin. Both granted the filmmaker on-air interviews that did not show either of them in the best light. Hubbard, who among other things is a MetLife director, came off as imperial and arrogant when asked about his consulting arrangements. Mishkin, who advises investment firms, was revealed to have written a positive white paper on Iceland not long before the country went bankrupt. It was paid for by Iceland’s Chamber of Commerce.

But it goes well beyond Columbia. A recent paper by two professors at the University of Massachusetts found that many financial economists who weighed in on the Wall Street overhaul signed into law in July failed to prominently disclose potential conflicts of interest. The upshot: The American Economic Association plans to take up a proposal to adopt “ethical standards for economists” at its annual meeting in Denver next week.